Tax Tuesday with Toby Mathis 11-27-18

Toby Mathis and Jeff Webb of Anderson Advisors like to spread tax knowledge to the masses. So, here they go again. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

• My parents own two homes and willing one each to me and my sister. What’s the best way to transfer the properties? Transfer inherited appreciated property through will/ trust
• If I offer a small-term life insurance policy for my employees, will tax benefits outweigh costs? Yes, but tax benefit of deducting premiums won’t equate to premiums you pay
• What is an accountable plan? How is it formed, described, executed? Plan must be between employer and employee; you account for certain expenses, we reimburse you
• How would I be taxed, if I get a loan on a 401K to use toward buying real estate investment properties? A loan isn’t a taxable event; you repay the loan through the 401K
• What’s a DB plan? Defined benefit; defined contribution (DC) defines amount you put in
• As a sole proprietor, can I write off life insurance premiums as a business expense? You can’t write off insurance premiums unless you're an employee; you don’t get deductions
• I've invested money into tech startups that have failed. How can I write off these losses? It's capital loss, and you need capital gains to offset it; can deduct up to $3,000 a year
• Can C Corp losses be applied to a personal 1040? Depends. Losses can be applied, if corp is liquidated, it’s a traditional corp, and 1244 stock election was made
• Does Anderson Advisors have a favorite app to track mileage? Anderson Advisors doesn’t, but Toby Mathis recommends MileIQ
• Can I get advice on how to save money from your company? Yes. We're happy to help, just contact us to talk to any of our representatives
• Can I get the $500 credit for my 17-year-old son? Child tax rate cuts off, if they're 17 at the end of the year
• If my child earned $11,000 in 2018 and no tax, does he have to file his own tax return? Yes. If you don't have a tax liability, you still have to file a tax return to claim it
• If my C Corp didn't make money its first year and all the expenses I had were for education, will I end up paying money to the IRS or receive refunds? The corporation would have the $40,000 deduction; it can reimburse $40,000 as a loss, not a deduction
• How do I structure, if I’m working for another company as a day job? Doesn't matter. You can work for multiple employers and set up your own companies
• Do I have to hire my wife as an employee to give her a pension? If you want to put money aside for her, she needs to work; you can't just give her a salary for doing nothing
• Can I invest directly into real estate in an opportunity zone or only in an opportunity zone fund? Put money into the qualified opportunity zone and invest through a qualified opportunity fund via an entity, not individually; you can take capital gains
• What's the best accounting software to use to run an S Corp? QuickBooks is the most used and people are familiar with it; also have a good bookkeeper
• I'll be 59 1/2 in March. Can I use my 401K to purchase real estate investments without penalty? How is the tax handled? If you pull money out, it has to be after you're 59 ½, not a day before; you can make a 72T election when you're 55 to spread out contributions

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Resources

338 H8 or H10 Election

Year-End Tax Planning

Schedule C

Schedule E

Schedule A

Form 1120

1244 Stock Election

MileIQ

1099 Miscellaneous

Form 5500

Securities and Exchange Commission

The Private Vault

QuickBooks

Breaking Bad

72T Election

Taxbot

1031 Exchange

Anderson Advisors Tax and Asset Protection Event

Toby Mathis

Anderson Advisors